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DECREE

Adjusting the common minimum wage

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 23, 1994 Labor Code and the April 2, 2002 Law Amending and Supplementing a Number of Articles of the Labor Code;

Pursuant to the Government's Decree No. 203/2004/ND-CP of December 14, 2004, providing for the minimum wage;

At the proposals of the Minister of Labor, War Invalids and Social Affairs, the Minister of Home Affairs and the Minister of Finance,

DECREES:

Article 1.- From October 1, 2005, the common minimum wage shall be raised to VND 350,000 per month from VND 290,000 per month as provided for in Clause 2, Article 1 of the Government's Decree No. 203/2004/ND-CP of December 14, 2004, providing for the minimum wage.

Article 2.- The common minimum wage defined in Article 1 of this Decision shall be used as a basis for the adjustment of pensions and social insurance allowances and the calculation of severance allowances, deductions and other entitlements calculated based on the minimum wage as follows:

1. To increase monthly pensions and social insurance allowances already adjusted under the Government's Decree No. 117/2005/ND-CP of September 15, 2005, by 20.7% for pensioners and those who enjoy social insurance allowances before October 1, 2005.

2. To increase September 2005 allowances by 20.7% for those who enjoy monthly social insurance allowances calculated on the basis of the minimum wage level.

3. To calculate severance allowances paid on the basis of the number of working months from October 1, 2005 onward to redundant laborers under the Government's Decree No. 41/2002/ND-CP of April 11, 2002, on policies toward laborers redundant due to reorganization of state enterprises, Decree No. 155/2004/ND-CP of August 10, 2004, amending Decree No. 41/2002/ND-CP, and to those who discontinue working due to payroll streamlining under the Government's Resolution No. 16/2000/NQ-CP of October 18, 2000, on streamlining payrolls in administrative agencies and non-business units, and Resolution No. 09/2003/NQ-CP of July 28, 2003, amending Resolution No. 16/2000/NQ-CP (the number of working years from September 30, 2005 backward shall be calculated under the guidance provided before October 1, 2005).

4. Minimum wage-based deductions and entitlements shall be re-calculated correspondingly.

Article 3.- Funds for the adjustment of the common minimum wage for various subjects shall be apportioned by the state budget from the following sources:

1. Each administrative agency or non-business unit under ministries, central agencies, provinces and centrally-run cities shall save 10% of their regular expenses for wage payment (excluding wage and payments of wage nature).

2. Non-business units having revenues shall use at least 40% of revenues they are permitted to retain according to regulations. Particularly, non-business units in the health service shall use at least 35% of revenues they are permitted to retain according to regulations (after subtracting expenses for medicines, blood, infusion fluids, and chemicals) for wage payment.

3. Administrative units having revenues shall use at least 40% of revenues they are permitted to retain according to regulations for wage payment.

4. To use 50% of the increased revenue amounts of local budgets for wage payments.

5. The central budget shall allocate additional funds so as to ensure the adjustment of the common minimum wage in cases where, though ministries, central agencies, provinces and centrally-run cities have strictly implemented the provisions of Clauses 1, 2, 3 and 4 of this Article, they still lack funds for adjustment of the common minimum wage.

6. The central budget shall ensure funds for the adjustment of pensions and social insurance allowances for those who had enjoyed pensions and social insurance allowances before October 1, 1995 (while the social insurance fund shall ensure funds for the adjustment of pensions and social insurance allowances for those who enjoy pensions and social insurance allowances from October 1, 1995 onward, including commune, ward or township officials who are enjoying monthly pensions and social insurance allowances according to the Government's Decree No. 09/1998/ND-CP of January 23, 1998, and Decree No. 121/2003/ND-CP of October 21, 2003).

Article 4.- Funds for the adjustment of the common minimum wage for subjects working in enterprises shall be ensured by such enterprises and accounted into their production costs or business costs.

Article 5.-

1. The Ministry of Labor, War Invalids and Social Affairs shall guide the application of the common minimum wage specified in Article 1 of this Decree to enterprises operating under the Law on State Enterprises, companies and enterprises operating under the Enterprise Law, cooperatives, cooperative groups, farms, households, individuals and other organizations that employ laborers; and guide the adjustment of pensions and social insurance allowances for those who enjoy pensions and social insurance defined in Clauses 1 and 2, Article 2 of this Decree; guide the calculation of severance allowances according to Clause 3, Article 2 of this Decree for redundant laborers under the Government's Decree No. 41/2002/ND-CP of April 11, 2002, and Decree No. 155/2004/ND-CP of August 10, 2004.

2. The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned ministries and branches in, guiding the application of the common minimum wage specified in Article 1 of this Decree to state agencies, non-business units, armed forces, political organizations, and socio-political organizations; and guiding the calculation of severance allowances according to the provisions of Clause 3, Article 2 of this Decree for those who discontinue working due to payroll streamlining under the Government's Resolution No. 16/2000/NQ-CP of October 18, 2000, and Resolution No. 09/2003/NQ-CP of July 28, 2003.

3. The Ministry of Finance shall assume the prime responsibility for, and coordinate with relevant ministries and branches in:

a/ Providing guidance on calculating and balancing funds for the adjustment of the minimum wage as provided for in Article 3 of this Decree.

b/ Appraising and proposing the Prime Minister to allocate additional funds for the adjustment of the common minimum wage to ministries, central agencies, provinces and centrally-run cities in cases specified in Clause 5, Article 3 of this Decree and funds for payment of pensions and social insurance allowances for those who enjoy pensions and social insurances before October 1, 2005.

Article 6.-

1. This Decree takes effect 15 days after its publication in "CONG BAO."

2. The provisions of this Decree apply as from October 1, 2005.

Article 7.- Ministers, heads of ministerial-level agencies, heads of Government-attached agencies and presidents of provincial/municipal People's Committees shall have to implement this Decree.